Charles Flanagan (Laois, Fine Gael) | Oireachtas source

I thank Deputy Kelleher for introducing the Bill. I very much appreciate that the objective of the Bill is to deal with the issue of insurance fraud, particularly as it arises in cases which may come to be dismissed under the specific terms of section 26 of the Civil Liability and Courts Act 2004. On behalf of the Government, I am, therefore, pleased to note the content of the Bill and to say it will not be opposed on Second Stage. I am doing this on the basis that substantial amendments to the Bill will be required and proposed by the Government on Committee Stage for reasons that I will outline and which Deputy Kelleher will fully appreciate. I welcome his initiative.

As Members will be aware, section 26 of the 2004 Act deals with the issue of dismissal on the basis of false or misleading evidence given in a personal injuries action. It does this both in regard to the relevant proceedings and to any affidavit sworn in support of those proceedings under section 14 of the Act. The court shall dismiss an action in such circumstances "unless, for reasons that the court shall state in its decision, the dismissal of the action would result in injustice being done". When considering this section, we should also remember section 25. That section already makes it an offence to give or adduce false or misleading evidence in personal injuries cases. It similarly makes it an offence to give, or dishonestly cause to be given, an instruction or information to a solicitor or a person acting on behalf of a solicitor or an expert in regard to a personal injuries action. For the purposes of section 25, the act is done dishonestly if the person does it "with the intention of misleading the court".

As reflected in Deputy Kelleher's introduction, the underlying challenge is, therefore, to make sections 25 and 26 of the 2004 Act more effective in their implementation, particularly in terms of dealing with any fraud which may lie behind them. I want to assure the Deputy that this specific issue is one of which I am acutely aware. It is among those matters being considered by the cost of insurance working group established by the Minister for Finance in July 2016 and chaired by Minister of State, Deputy D’Arcy. The objective of the working group is to identify and examine the drivers of the cost of insurance, and recommend short, medium and longer-term measures to address the issue of increasing insurance costs. A significant factor identified by the working group in its reports, which are publicly available with action updates on the Department of Finance website, is the impact of fraudulent insurance claims.

The group published its report in January 2017 and its further report on the cost of employer and public liability insurance in January 2018. My own Department or An Garda Síochána are the lead entities in respect of 17 out of 48 recommendations that have arisen from these reports, and a number of them also involve the Courts Service in their delivery. The working group has brought together all the relevant Departments and offices involved with the process, for example, the Personal Injuries Assessment Board and the State Claims Agency. In addition, the working group embarked on an extensive consultation process and met with the key stakeholders, including Insurance Ireland, and considered submissions received. As part of that process, the need has been highlighted for greater operational linkage between sections 25 and 26, and for greater follow-up to personal injury cases in terms of prosecuting alleged insurance fraud. Key to this approach has been the convening of a fraud round-table by the Department of Finance in late 2017, which is progressing a number of fraud-specific recommendations, including with the direct support of my Department.

In its report on the cost of motor insurance published in January 2017, the working group reviewed sections 25 and 26 of the Civil Liability and Courts Act 2004. It noted that the number of recorded prosecutions and convictions for the offence of false evidence in section 25 is very low and that this suggests a need for further co-operation between the insurance industry and An Garda Síochána. On the basis that much more could be done by the insurance industry and other defendants to pursue allegations of insurance fraud, and that the framework for the reporting of alleged insurance fraud cases to the Garda authorities is now being strengthened, the working group was satisfied that sections 25 and 26 did not need further review.

In its January 2018 report on the cost of employer and public liability insurance, the working group further acknowledged that the decision to apply section 26 is a difficult one. There are a range of considerations to be taken into account by the judge concerned in determining whether fraudulent or misleading evidence given in any claim is “material” to the claim on the basis of the evidence put before him or her, or whether there is any injustice that would be caused if the claim were dismissed. The working group was again of the view “that appropriate use of the legislative provisions in the 2004 Act could be facilitated by encouraging industry to make complaints to An Garda Síochána where they believed fraud to have featured in claims”.

The group also believed that more could be done to establish a nexus between the relevant stakeholders to allow for the claims of fraud to be investigated and, if appropriate, prosecuted. It also considered that it was not conducive to the effective tackling of insurance fraud if there was a systematic view among defendants or their legal advisers that raising an allegation of fraud under section 26 of the 2004 Act may carry a risk of awards of aggravated damages.

As a direct result of these deliberations, a number of measures are being taken by the Government by way of ensuring that sections 25 and 26 can have their intended effect. Recommendations 11 and 12 of the working group’s January 2018 report concern the production of statistics by An Garda Síochána and the Courts Service on complaints, investigations, prosecutions and convictions relating to fraud within the personal injuries area. I understand it is anticipated that the necessary PULSE update will be in place for the end of this month. Recommendation 13 of that report recommends that Insurance Ireland, An Garda Síochána and the Office of the Director of Public Prosecutions agree a set of guidelines in respect of the reporting of suspected fraudulent insurance claims. As a result, I am happy to report that the new guidelines for the reporting of allegations of fraudulent insurance claims to An Garda Síochána were published yesterday, as agreed between the Garda National Economic Crime Bureau and Insurance Ireland.

I also intend to introduce, as recommended, an early amendment to section 14 of the Civil Liability and Courts Act 2004, which deals with the matter of a verifying affidavit in a personal injuries action, as referred to in section 26 of that Act. The amendment, if enacted, would provide for a court hearing a personal injuries action, where there is a failure to lodge an affidavit in court by the set deadline, to draw inferences and deduct costs from the party responsible for this failure. While these are just some examples, it will be appreciated that a concerted policy approach is, therefore, being taken by the Government with the support of the cost of insurance working group and its round-table on fraud. This represents a series of mutually reinforcing measures that, in their collective implementation, will give greater effect to sections 25 and 26 of the Civil Liability and Courts Act 2004.

I now turn to some specific issues that arise in regard to Deputy Kelleher's proposed amendment under the Bill that will need to be considered. While it has been the case that judges have ordered matters to be brought to the attention of the Office of the Director of Public Prosecutions in some instances, the director would generally refer any alleged criminal matters onwards for the consideration of An Garda Síochána. The office has confirmed to my Department that it is not within the function of the director, as prescribed in the Prosecution of Offences Act of 1974, to investigate the commission of criminal offences or to direct An Garda Síochána to do so, or as to the manner in which this should be done. Accordingly, where there is a question of whether there should be an investigation into the commission of a criminal offence, in this case of alleged insurance fraud, it is considered that it should be referred to An Garda Síochána.

Another fundamental consideration is that of differing standards of proof. Where a case is dismissed under the terms of section 26 of the Civil Liability and Courts Act 2004, this is a matter on which the court has been satisfied on the balance of probabilities that false or misleading evidence was intentionally provided. It would be for another court to decide in the context of a criminal trial whether it was satisfied beyond a reasonable doubt that an offence was committed under section 25 or any other relevant provision.

Consideration must be given to the mandatory referral of transcripts and evidence as proposed in the Bill as that might well be seen as an interference with the separation of powers in so far as it removed discretion from the Judiciary. A number of other concerns have been raised regarding the referral of court transcripts on practical grounds of availability, cost and the fact that there may be reasons this would be contrary to the interests of justice in particular cases. Examples might include referring an entire transcript where there is sensitive personal or medical information or transcripts involving minors or in cameraproceedings. However, while further consideration will be given to these and other matters, I am happy to note that the content of the Bill proposed by Deputy Billy Kelleher is not being opposed on the understanding that serious amendment will be required and proposed by the Government on Committee Stage.

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